Shri Subhah Rajaram Poddar, Bhusawal V. ITO Wd 2(3), Jalgaon

ITA 343/PUN/2012

• Counselvise Citation: 34324514 RSA 2012
• Duration Of Justice: 2 year(s) 1 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-03-2014
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 18-09-2013
• Assessment Year: 2005-2006
• Appeal Filed On: 20-02-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: A K MODI
• Keywords: Business income
• Section: 69

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B , PUNE BEFORE: SHRI G. S. PANNU, ACCOUNTANT MEMBER AND SHRI R.S. PADVEKAR, JUDICIAL MEMBER ITA NO . 343 /PN/20 12 ASSESSMENT YEAR : 200 5 - 06 SHRI SUBHASH RAJARAM PODDAR VARANGA ON TAL. - BHUSAWAL, DISTT. - JALGAON (APPELLANT) VS. ITO, WARD - 2(3), JALGAON (RESPONDENT) PAN NO. AIGPP7116C APPELLANT BY: SHRI NIKHIL PATHAK RESPONDENT BY: SHRI A.K. MODI DATE OF HEARING : 20 - 02 - 2014 DATE OF PRONOUNCEMENT : 21 - 03 - 2014 OR DER P ER R.S. PADVEKAR , JM : - IN T H IS APPEAL THE ASSESSEE CHALLENG ED THE IMPUGNED ORDER OF THE LD. CIT(A) - II, NASHIK D ATED 09 - 12 - 2011 FOR THE A.Y . 200 5 - 06 . THE ASSESSEE HAS TAKEN THE FOLLOWING GROUNDS IN THE APPEAL: 1. ON THE FACTS AND IN LAW THE LD. CIT( A) HAS ERRED IN CONFIRMING ADDITION OF RS.31,75,320/ - MADE BY THE A.O. ON ACCOUNT OF ALLEGED UNEXPLAINED CASH DEPOSITS IN BANK. 2. ON THE FACTS AND IN LAW THE LD. CIT(A) HAS ERRED IN STATING FACTUALLY INCORRECT REASONS FOR NOT ACCEPTING THE CONTENTION OF THE APPELLANT THAT THE SAID CASH DEPOSITS DURING THE YEAR REPRESENTS HIS TURNOVER AND HENCE CANNOT BE ADDED AS HIS INCOME. 2. THE FACTS WHICH ARE REVEALED FROM THE RECORD AS UNDER. THE ASSESSEE IS AN INDIVIDUAL AND HE IS DEALING IN THE STAMP AND COMMISSION ETC. THE ASSESSEE FILED THE RETURN OF INCOME FOR THE A.Y. 2005 - 06 DECLARING TOTAL INCOME AT RS.81,800/ - AND AGRICULTURAL INCOME OF RS.75,000/ - . THE ASSESSEES CASE WAS SELECTED FOR SCRUTINY BY ISSUING 2 ITA NO . 343/PN/2012, SUBHASH RAJARAM PODDAR, JALGAON NOTICE U/S. 143(3). AS PER THE INFORMATION RECEIVED THROUGH AIR , IT WAS REVEALED THAT THE ASSESSEE HAS MADE CASH DEPOSIT S OF RS.31,75,320/ - IN JALGAON JANTA SAHAKARI BANK LTD., BHUSAWAL BRANCH IN THE F.Y. 2004 - 05. THE ASSESSING OFFICER SOUGHT THE EXPLANATION OF THE ASSESSEE . T HE ASSESSING OFFICER HAS GIV EN THE DATE WISE DETAILS OF THE DEPOSITS IN THE ASSESSMENT ORDER. AS NOTED BY THE ASSESSING OFFICER , THE ASSESSEE COULD NOT EXPLAIN TO THE SOURCE OF THE DEPOSIT. HE, ACCORDINGLY, MADE THE ADDITION TO THE TOTAL INCOME OF THE ASSESSEE IN RESPECT OF AMOUNTS D EPOSITED IN BANK A/C . THE ASSESSEE CHALLENGED THE ADDITION BEFORE THE LD. CIT(A). 3. THE ASSESSEE SHOWN THE COMMISSION OF INCOME ON SALE OF STAMPS AND THE WRITING CHARGES. BEFORE THE LD. CIT(A) THE ASSESSEE STATED THAT HE IS NOT REGULARLY MAINTAINING THE BOOKS OF ACCOUNT. HE FURTHER STATED BEFORE THE LD. CIT(A) THAT HE HAD CARRIED OUT THE BUSINESS OF COMMISSION ON SALE OF RECHARGE VOUCHERS OF TATA TELE SERVICES (MAHARASHTRA) LTD. AND WAS ALSO ENGAGED IN TRADING OF MOBILE HANDSETS AT VILLAGE VARANGAON, TAL. - BHUSAWAL. THE LD. CIT(A) HAS OBSERVED THAT IN RESPECT OF THIS ACTIVITY NO INFORMATION WAS FILED BEFORE THE ASSESSING OFFICER. THE LD. CIT(A) REJECTED THE CLAIM OF THE ASSESSEE THAT THE CASH DEPOSITS IN HIS BANK ACCOUNT WITH JALGAON JANTA SAHAKARI B ANK LTD., BHUSAWAL IN THE F.Y. 2004 - 05 REPRESENTED COMMISSION ON SALE PROCEEDS OF RECHARGE VOUCHERS OF TATA TELE SERVICES (MAHARASHTRA) LTD. AND ALSO SALE PROCEEDS OF MOBILE HANDSETS. THE ASSESSEE FILED THE COPY OF PRODUCTION DISTRIBUTION AGREEMENT DATED 08 - 12 - 2004 BETWEEN ONE M/S. DRIVE INDIA.COM LTD. AND M/S. HARI SERVICES (A PARTNERSHIP FIRM IN WHICH HE IS SHOWN AS A MANAGING PARTNER) AND PREPAID DISTRIBUTION AGREEMENT DATED 08 - 12 - 2004 BETWEEN TATA TELE SERVICES (MAHARASHTRA) LTD. AND M/S. HARI SERVICES . THE ASSESSEE ALSO FURNISHED A CERTIFICATE DATED 14 - 11 - 2011 FROM TATA TELE SERVICES (MAHARASHTRA) LTD. CERTIFYING THAT M/S. HARI SERVICES, VARANGAON, PROP. SUBHASH PODDAR WAS NOT HAVING ANY 3 ITA NO . 343/PN/2012, SUBHASH RAJARAM PODDAR, JALGAON RECORD OF PURCHASE IN THE YEAR 2004 - 05 TO THE COMPANY S OFFICE A T AMABAD, NASHIK. THE ASSESSEE ALSO FURNISHED A COPY OF RECEIPT FROM TATA TELE SERVICES (MAHARASHTRA) LTD. SHOWING A PAYMENT OF COMMISSION OF RS.34,633/ - AS ON 31 - 03 - 2005 TO M/S. HARI SERVICES, VARANGAON. THE LD. CIT(A) DID NOT ACCEPT THE EXPLANATION TO T HE ASSESSEE IN RESPECT OF THE AMOUNT DEPOSITED ON THE DIFFERENT DATES IN HIS INDIVIDUAL BANK ACCOUNT. THE REASONS AND FINDINGS OF THE LD. CIT(A) ARE AS UNDER: 6. I HAVE CAREFULLY GONE THROUGH THE ASSESSMENT ORDER, COPY OF BANK ACCOUNT OF THE APPELLANT AND SUBMISSION OF THE APPELLANT FILED DURING THE APPELLATE PROCEEDINGS. I FIND FROM THE RETURN OF INCOME AND OTHER DETAILS AVAILABLE ON RECORD THAT THE APPELLANT NEVER MENTIONED THAT HE WAS ENGAGED IN THE BUSINESS OF MOBILE HANDSETS AND THAT HE WAS EARNING C OMMISSION ON SALE OF RECHARGE VOUCHERS OF TATA TELE SERVICES (MAHARASHTRA) LTD. EVEN IN HIS GROUNDS OF APPEAL AND STATEMENT OF FACTS HE DID NOT MENTION THIS FACT. IN THE STATEMENT OF FACTS FILED ALONGWITH THE FORM NO. 35 ON 31/2010 - 11 HE HAS MENTIONED AS FOLLOWS: THAT HE IS STAMP VENDOR. HE PROVIDES STAMP ON COMMISSION BASIS AND DOES WRITING WORK FOR WHICH HE TAKES CHARGES. FOR THE YEAR UNDER APPEAL THE APPELLANT HAD FILED ITS RETURN OF INCOME DECLARING TOTAL INCOME RS.81,800/ - AS INCOME FROM COMMISSIO N AND RS.75,000/ - AND AGRICULTURAL INCOME A PERUSAL OF THE ASSESSMENT FOLDER ESTABLISHES THAT THE APPELLANT DID NOT FILE ANY DETAIL IN REGARD TO CASH DEPOSITS IN HIS BANK ACCOUNT NO. 4233 WITH JALGAON JANTA SAHAKARI BANK LTD., BHUSAWAL DESPITE REPEATED OP PORTUNITIES PROVIDED TO HIM BY THE AO. DURING THE APPELLATE PROCEEDINGS ALSO, HE DID NOT FURNISH DETAILS DESPITE THE FACT THAT HIS APPEAL WAS PENDING SINCE 21/06/2010 AND ALSO THAT THE APPEAL WAS FIXED ON 30/11/2010, 24/01/2011, 11/02/2011 AND 19/05/2011. THE APPELLANT FOR THE FIRST TIME ON 19/09/2011 TOOK A STAND THAT HIS CASH DEPOSITS WERE OUT OF COMMISSION ON SALE OF RECHARGE VOUCHERS OF TATA TELE SERVICES (MAHARASHTRA) LTD. AND ALSO TRADING OF MOBILE HANDSETS. UNDER THE FACTS AND CIRCUMSTANCES OF THE CA SE, THE CONTENTION OF THE APPELLANT AND THE COPIES OF THE AGREEMENTS FILED BY THE APPELLANT CANNOT BE ADMITTED AS EVIDENCE IN THE LIGHT OF RULE 46A OF THE LT.RULES 1961. THE SAME ARE REJECTED. NOTWITHSTANDING THE ABOVE, THE SAID DOCUMENTS CANNOT BE TREATED 4 ITA NO . 343/PN/2012, SUBHASH RAJARAM PODDAR, JALGAON AS RELIABLE FOR VARIOUS REASONS: FIRSTLY, THE APPELLANT, NEVER MENTIONED THE EXISTENCE OF SUCH BUSINESS ACTIVITY AND SUCH AGREEMENTS DURING THE ASSESSMENT PROCEEDINGS; SECONDLY, THE ALLEGED COPIES OF AGREEMENTS ARE NOT WITH THE APPELLANT PER SE. THE SO CA LLED AGREEMENT IS BETWEEN TATA TELE SERVICES (MAHARASHTRA) LTD./DRIVE INDIA .COM LTD. AND M/S. HARI SERVICES (A PARTNERSHIP CONCERN); THIRDLY, THE CERTIFICATE DTD.14/11/2011 ISSUED BY TATA TELESERVICES (MAHARASHTRA) LTD. CLEARLY STATED THAT: 'THIS IS TO CE RTIFIED THAT HARI SERVICES, VARANGAON PROPRIETOR SUBHASH POTDAR PREPAID DISTRIBUTOR TATA INDICOM WAS NOT HAVING ANY RECORD OF PURCHASE IN THE YEAR 2004 - 05 TO OUR COMPANY OFFICE ATAMBAD, NASHIK.' FOURTHLY, THE SAID AGREEMENT WAS STATED TO BE ENTERED INTO ON 08/12/2004. HOWEVER, THE CASH DEPOSITS IN HIS BANK ACCOUNT STARTED FROM 16/04/2004. THE APPELLANT DEPOSITED CASH OF RS.1,97,500/ - IN HIS BANK ACCOUNT ON 16/04/2004, RS.3,30,000/ - ON 28/04/2004 AND RS.1,00,000/ - ON 01/07/2004 AND SOON. ON PERUSAL OF PAY - IN - SLIPS, I FIND THAT ALL THESE CASH DEPOSITS HAVE BEEN MADE BY THE APPELLANT HIMSELF. UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE, I AM OF THE VIEW THAT THE APPELLANT HAS CONCOCTED THE SAID PAPERS AND OBTAINING STAMP PAPERS IN BACK DATE WOULD NOT HAVE BEE N A PROBLEM FOR THE APPELLANT AS HE HIMSELF WAS STAMP PAPER VENDOR. IN VIEW OF THE ABOVE SUBMISSION OF THE APPELLANT THAT CASH DEPOSITS IN HIS BANK ACCOUNT WERE OUT OF THE BUSINESS OF COMMISSION ON SALE OF RECHARGE VOUCHERS AND TRADING OF MOBILE HANDSETS C ANNOT BE CONSIDERED AS RELIABLE AND TRUE ESPECIALLY IN ABSENCE OF ANY DOCUMENTARY EVIDENCE IN REGARD TO COMMISSION EARNED OR SALE PROCEEDS ON ACCOUNT OF MOBILE HANDSETS. THE SUBMISSION OF THE APPELLANT SEEMS TO CONCOCTED AND FABRICATED TO EXPLAIN THE SOURC E OF CASH DEPOSITS IN HIS PERSONAL ACCOUNT. IF THE DEPOSITS WERE OUT OF BUSINESS INCOME OF M/S. HARI SERVICES, THEN THE PROCEEDS WOULD HAVE BEEN DEPOSITED IN THE FIRM'S BANK ACCOUNT AND NOT IN THE PARTNER'S BANK ACCOUNT. MOREOVER, THERE WAS NO COMPULSION O N THE APPELLANT NOT TO DISCLOSE THE RELEVANT FACTS I.E. COMMISSION INCOME ON SALE OF RECHARGE VOUCHERS AND TRADING OF MOBILE HANDSETS BEFORE THE AO DURING THE ASSESSMENT PROCEEDINGS. THE COPIES OF THE AGREEMENT DO NOT SUPPORT THE CASH DEPOSITS IN APPELLANT 'S ACCOUNT AS IT IS CLEARLY ESTABLISHED THAT THERE WAS NO TRANSACTION WITH THE SAID COMPANIES IN A.Y. 2005 - 06. FURTHER THERE ARE NO DOCUMENTARY EVIDENCES IN SUPPORT OF TRADING OF MOBILE 5 ITA NO . 343/PN/2012, SUBHASH RAJARAM PODDAR, JALGAON HANDSETS IN VILLAGE. THE APPELLANT SEEMS TO HAVE COOKED UP THE STORY A ND CONCOCTED THE PAPERS AT APPELLATE STAGE WHICH CANNOT BE ACCEPTED AS ADMISSIBLE EVIDENCE UNDER RULE 46A OF THE I.T.RULES. FURTHER, DOCUMENTS LACK AUTHENTICITY AND THEREFORE, REJECTED ON MERIT ALSO. THE CONTENTION OF THE APPELLANT IS THEREFORE, REJECTED. 7. IN VIEW OF THE ABOVE, IT IS HELD THAT THE APPELLANT HAS FAILED TO FURNISH ANY CONVINCING EXPLANATION IN SUPPORT OF SOURCES OF CASH DEPOSITS IN HIS BANK ACCOUNT WITH JALGAON JANTA SAHAKARI BANK LTD. AO WAS THEREFORE, JUSTIFIED IN TREATING THE SAME AS THE APPELLANT'S UNDISCLOSED INVESTMENT AND TREATING THE CASH DEPOSIT OF RS.31,75,320/ - AS HIS INCOME U/S. 69 OF THE I.T. ACT. THE ADDITION IS CONFIRMED. ACCORDINGLY, THE LD. CIT(A) HELD THAT THE ASSESSEE FAIL ED TO ESTABLISH THE SOURCE OF DEPOSITS. NOW THE A SSESSEE IS IN APPEAL BEFORE US. 4. WE HAVE HEARD THE RIVAL SUBMISSIONS OF THE PARTIES AND PERUSED THE RECORD. THE ASSESSEE HAS FILED THE PAPER BOOK CONSISTING OF THE FOLLOWING DOCUMENTS: SR. NO. PARTICULARS PAGE NOS. 1 COPY OF SUBMISSION TO CIT(A) 1 3 2 COPY OF BANK STATEMENT 4 7 3 COPY OF CERTIFICATE ISSUED BY JALGAON JANATA SAH. BANK DATED 02.01.2014 GIVING DETAILS OF VARIOUS DDS ISSUED BY ASSESSEE DURING F.Y. 2004 - 05 ALONG WITH ENGLISH TRANSLATION. 8 - 9 4 COPY OF CERTIFICATE DATED 14.11.2011 I SSUED BY TATA TELESERVICES (MAHARASHTRA) LTD. 10 5 COPY OF CERTIFICATE DATED 07.02.2012 ISSUED BY TATA TELESERVICES (MAHARASHTRA) LTD. 11 5. THE LD. COUNSEL VEHEMENTLY ARGUED THAT THE ASSESSEE HAS DRAWN THE DD FROM THE JALGAON JANTA SAHAKARI BANK LTD., BHUSAWAL IN THE NAME OF M/S. DRIVE INDIA.COM LTD. FOR GETTING THE HANDSETS. APART FROM THAT NOTHING IS FILED BEFORE US EXCEPT THE STATEMENT OF JALGAON JANTA SAHAKARI BANK LTD., BHUSAWAL. THE LAW IS WELL SETTLED THAT IS BURDEN ON 6 ITA NO . 343/PN/2012, SUBHASH RAJARAM PODDAR, JALGAON THE ASSESSEE TO EXPLAIN THE SOURCE OF DEPOSITS. WE ALSO FIND THAT THERE IS NO CONSISTENCY IN THE EXPLANATION OF THE ASSESSEE AND THE ASSESSEE HAS TAKEN THE DIFFERENT STANDS BEFORE THE ASSESSING OFFICER AND THE LD. CIT(A) . W HATEVER THE EVIDENCES ARE FILED BY THE ASSESSEE , DO NOT REMOTELY SUPPORT THE CASE OF ASSESSEE. WE ALSO FIND THAT THE COPIES OF THE AGREEMENT FILED BY THE ASSESSEE ARE BETWEEN THE TATA TELE SERVICES (MAHARASHTRA) LTD. AND M/S. HARI SERVICES WHICH IS THE PARTNERSHIP FIRM. APART FROM THAT NOTHING HAS BEEN PLACE D BEFORE US EXPLAINING THE SOURCE. AFTER GIVING OUR ANXIOUS CONSIDERATION TO THE REASONS RECORDED BY THE LD. CIT(A) , IN OUR OPINION NO INTERFERENCE IS CALLED FOR AS BEFORE US ALSO THE ASSESSEE FAIL ED TO EXPLAIN THE SOURCE IN RESPECT OF THE DEPOSITS MADE I N THE JALGAON JANTA SAHAKARI BANK LTD., BHUSAWAL. ACCORDINGLY, ORDER OF THE LD. CIT(A) IS CONFIRM AND GROUNDS TAKEN BY THE ASSESSEE ARE DISMISSED. 6. IN THE RESULT, THE ASSESSEES APPEAL IS DISMISSED. PRONOUNCED IN THE OPEN COURT ON 21 - 03 - 201 4 SD/ - SD/ - ( G.S. PANNU ) ( R.S. PADVEKAR ) ACCOUNTANT MEMBER JUDICIAL MEMBER RK /PS PUNE , DATED : 21 ST MARCH, 20 1 4 COPY TO 1 ASSESSEE 2 DEPARTMENT 3 THE CIT(A) - II, NASHIK 4 THE CIT - II, NASHIK 5 THE DR, ITAT, B BENCH, PUNE . 6 GUARD FILE. //TRUE COPY// BY ORDER PRIVATE SECRETARY INCOME TAX APPELLATE TRIBUNAL PUNE